Benzinga | Jan 12, 2022 09:26AM EST

Sono-Tek Reports Q3 Sales $4.4M, Up 15% YoY; Backlog On Nov. 30 Reached $6.5M

Q3 Sales of $4.4M, Up 15% Year-over-Year; Record Backlog of $6.5M, up 69% from FYE February 28, 2021

MILTON, N.Y., Jan. 12, 2022 (GLOBE NEWSWIRE) -- via NewMediaWire -- Sono-Tek Corporation (NASDAQ:SOTK), the leading developer and manufacturer of ultrasonic coating systems, today reported financial results for the third quarter and first nine-month periods of fiscal year 2022, ended November 30, 2021.

Third Quarter Fiscal 2022 Highlights (compared with the third quarter of fiscal 2021 unless otherwise noted).

* Net sales increased 15% to $4,419,000, driven by strong sales to Asia for medical device coating machines and clean energy coating systems.

* Gross Profit increased 12% to $2,159,000 due to the increase in sales.

* Gross Margin was 48.9% compared with 50.5% for the prior year period due to changes in product mix.

* Operating income increased 10% to $491,000 due to the increase in gross profit, partially offset by increases in operating expenses.

* Income before taxes increased 9% to $493,000.

* Backlog on November 30, 2021 reached another record high of $6,505,000, an increase of 3% compared with backlog of $6,332,000 on August 31, 2021 (the end of the fiscal Q2) and increased 69% compared to backlog of $3,851,000 on February 28, 2021 (the end of fiscal year 2021).

Nine Month Fiscal 2022 Highlights (compared with the first nine months of fiscal 2021 unless otherwise noted)

* Net Sales increased 13% to $12,134,000, primarily driven by sales of several recently developed new products for the medical market as well as continued expansion of Sono-Tek systems used in the clean energy sector.

* Gross Profit increased 18% to $6,057,000 due to higher sales and a favorable product mix.

* Gross Margin expanded 230 basis points to 49.9% primarily due to a favorable product mix and lower than expected warranty and installation costs.

* Operating Income increased 54% to $1,282,000 due to the increase in gross profit, partially offset by increases in operating expenses.

* Income before taxes increased 50% to $1,295,000, excluding the benefit from PPP loan forgiveness of $1.0 million.

* As of November 30, 2021, the Company had no outstanding debt.

* Cash and marketable securities were $10,184,000 on November 30, 2021, an increase of $1,537,000 from February 28, 2021, nearly half of which was due to an increase in customer deposits of $729,000, bringing total deposits to $1,896,000 at November 30, 2021. The increase in customer deposits is primarily due to our record backlog and the growing percentage of orders for costly, complex systems in the backlog.

Guidance

* For the fourth quarter of FY2022, Sono-Tek expects double digit sales growth over the comparable period of the prior fiscal year.

* Sono-Tek anticipates double digit sales growth for FY2022, and continues to expect the highest annual sales in corporate history for the fiscal year ending February 28, 2022.